With Debt Ceiling Looming, Are Investors Too Compliant?


27% profit every 20 days?

This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.


Volatility levels continue to drop in 2013 after a rather non-eventful 2012. Despite the fiscal cliff, debt ceiling debates and the $1 trillion platinum coin, investors seem rather calm.

VIX levels, which measure the expected volatility in the market and sometimes referred to as the "fear gauge", have been rather low considering current economic events.

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VIX levels continue to drop in 2013

 

VIX levels remained relativiely unchanged in 2012 - source CBOE

 

And the trend is not just in the US. Emerging markets, which tend to be more sensitive to global macro economic conditions, are also seeing lower levels of volatility:

Volatility Emerging Market - source CBOE

Doubline's Jeffrey Gundlach refers to 2013 as the "Year of the Snake". That the markets are coiling, waiting to strike.

He may be on to something...


27% profit every 20 days?

This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.